CEO Cost Amicus $500k

Payroll tax withholding problems are the scary story adult founders tell younger founders to keep them up at night. Every group of operator friends I have has a collection of stories about this. Get an accountant before you hire your first W2 employee, and use a payroll service.<p>Just the idea of trying to operate as a director&#x2F;partner at a startup without an accountant gives me the willies. It&#x27;s mindboggling to think people actually wing it past the point where they&#x27;re making payroll.

I&#x27;m going to build on a common HN adage:<p>1) Don&#x27;t roll your own crypto;<p>2) Don&#x27;t maintain your own SMTP server; and..<p>3) Don&#x27;t do your own payroll.<p>There are LOTS of things you can try to do yourself as an entrepreneur (some are easier than others), but I think this is a handy list. It boils down to risk vs. cost. The cost of outsourcing the three of these is relatively small -- the cost of screwing any one of them up is massive.

People here are quite harsh on Seth Bannon.<p>He is a prolific poster on HN, whose comments and articles often have pretty good insights.<p>Yet every time I read about his history, I just ask, why? So many of his choices and risks seem so reckless. Is he truly foolish? Or are we the beneficiaries of hindsight, of stress free decision making, ungrounded in the day-to-day reality of running Amicus?<p>I think the latter is closer to the truth. Meeting him in real life, I realized he was just as sharp in person as on paper. (Also very good at Catan. Damn you Seth.)<p>And talking with Seth was one of the conversations that helped me to get started on my business, which should break $200K in sales this year.<p>From what I know about his current startup investments, I think the headlines will be a lot kinder to him in the years to come.<p>Seth has ample ambition, and when someone with ambition finds an opportunity they want, but lack the credentials for, they&#x27;ll fight for it regardless. Seth&#x27;s mistake was thinking others were the same.

If you are an employee of a startup, please make sure to check on ssa.gov to make sure they are receiving your payroll taxes. Because if the startup isn&#x27;t paying them, and they go bust, this will reduce your social security income at retirement time.<p>I don&#x27;t know if there is a way to get up to date info, but you can at least catch it after year end. And if you do find a dependency, bringing it up early to your employer could end up saving them too.

&gt;According to Bannon, Amicus’s back taxes, interest and penalties, and legal fees cost the company over $500,000.<p>Ok, so how much of that was just back taxes? They would have had to pay those anyway, so you can&#x27;t really count those the same as a penalty.<p>$500,000 - (back taxes) = actual losses due to negligence.<p>Now compare the actual losses to the salary for a CFO. If the CFO cost more than the losses, Amicus still came out ahead.<p>I am not advocating for negligence, but you should always look for point of view bias in articles like this.

This seems like just a rehash of Seth&#x27;s own blog post: <a href="http:&#x2F;&#x2F;sethbannon.com&#x2F;mistakes-you-should-never-make" rel="nofollow">http:&#x2F;&#x2F;sethbannon.com&#x2F;mistakes-you-should-never-make</a>

Ah this brings back memories. I&#x27;m honestly blown away that Amicus only had 3.2M in funding. They consistently got a ton of press (they had at least 2 stories in Techcrunch in 2012 and I remember Seth doing a photoshoot in the General Assembly office). It was also one of a few companies I saw self-combust out of GA, at least this one has become a public cautionary tale ala Knight Capital. Hopefully Topper is doing well

&quot;Bannon pretty much ran the company single-handedly&quot;.<p>I am not following: if he was the only person running the company, how did payroll taxes get so large ? Was it for his own pay? The article neglects what the taxes are for which would have been helpful.

It&#x27;s not clear how much of that is penalties and how much was the original amount unknowingly owed. The CEO didn&#x27;t really cost the company the original amount, he just was unaware of it (and may have made different choices if aware)

Just a friendly reminder that payroll tax is not inherently hard, though US payroll tax may be.<p>Down here in New Zealand, for instance, it&#x27;s quite reasonable to manage payroll for a smallish company yourself. There are some services&#x2F;tools which people seem to like too.<p>In the case of an employee without student loans nor child support payments: once a month, the employer submits some information and pays tax to IRD, usually online. Inputs are the employee&#x27;s gross income, their IRD number, and the contribution rate to their KiwiSaver (retirement plan). Outputs are effectively four numbers: pay the employee $A, send the IRD $B, and then the company needs to record two other amounts which relate to KiwiSaver. Manually dealing with the last two bits may even be obsolete - there&#x27;s a new process available now, but I haven&#x27;t switched to it yet.<p>This online calculator shows most of the work required <a href="https:&#x2F;&#x2F;www.ird.govt.nz&#x2F;calculators&#x2F;keyword&#x2F;kiwisaver&#x2F;calculator-paye.html" rel="nofollow">https:&#x2F;&#x2F;www.ird.govt.nz&#x2F;calculators&#x2F;keyword&#x2F;kiwisaver&#x2F;calcul...</a><p>Income tax is also quite easy from the employee&#x27;s perspective: decide how much to contribute to KiwiSaver (usually when you start the job), do your work, and receive your pay. There&#x27;s no annual tax return to file for most people, as the right amount of money shows up in the right places.

Was it normal in 2012 to not use a payroll company? This has become a non-issue due to companies like Gusto or Justworks.

This is just plain incompetence, up and down the line.<p>Any idiot can google this stuff and find out exactly what he needs to do within an hour.

It&#x27;s not hard to find people who could fill the CFO role early on, but it can be hard to decide whom to trust.

Unfortunately it seems their security certificate also lapsed 8 days ago - <a href="https:&#x2F;&#x2F;amicushq.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;amicushq.com&#x2F;</a> ?

Thank god for Justworks and Gusto